Question

Consider the supply of avocados. explain why a change in the price of fertilizer causes a shift in the supply curve for avocados rather than a movement along the supply curve for avocados. a change in the price of fertilizer causes a shift in the supply curve for avocados because

a. the price of avocados is held constant along a supply curve.
b. the price of fertilizer also shifts avocado demand.
c. the price of fertilizer changes for a given supply of avocados.
d. a change in the cost of inputs changes how much a producer will supply at any given price.
e. factors representing the cost of production do not affect avocado prices.

Answer 1

I believe the answer is: D. a change in the cost of inputs changes how much a producer will supply at a given price

Fertilizer is considered to be an input for the avocado since it is an integral part for the avocado producers to transform raw material (Avocado seeds) into a finished product (full grown avocado), Which mean when the cost of fertilizer is increased, the amount of capital needed before their avocado is ready to sell would also increased.